Morning trading has seen the FTSE 100 drop 60 points, mirroring losses in Europe as indices continue to fall from recent highs.

  • Virus news hits a vulnerable market.

  • Little fresh positive news to drive overextended indices higher.

  • Kingfisher weakens after Q3 sales figures.

Virus fears have hit an overextended global stock market this morning, knocking European equities sharply lower and pointing towards a weaker start in the US. After the soaraway gains of the past two weeks, equities now look much more richly-valued, and thus vulnerable to an outbreak of bad news. This is precisely what we got in the form of spreading infections in the US but also in Japan, a worrying sign indeed for a country that had been successful earlier in the year in controlling the spread. Even reports of success for AstraZeneca's new vaccine were not enough, the impact of these vaccine announcements having been on a declining trend since the first, excitedly-received news from Pfizer almost three weeks ago. There appears to be little desire to chase equities at these levels, and perhaps rightly so, with markets looking priced for perfection and still vulnerable to some short-term turbulence.

Speaking of things looking priced for continued good news, Kingfisher has fallen 4% after reporting a strong set of sales figures for Q3. The news appears to more than justify the huge gains in the shares since March, up 120% versus a mere 22% for the index. But while the overall investment case remains strong, investors appear content for now to sit and await a better chance to buy back in later in the year.

Ahead of the open, we expect the Dow to start at 29,257, down 181 points from Wednesday's close.

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